Market Highlights: Wall Street falls as rate cut bets slashed; Rudd bullish on China, and 5 small caps to watch
Aussie shares are poised to fall further on Thursday as Wall Street fell deeper into the red. At 8am AEDT, the ASX 200 index futures contract was pointing down by -0.3%.
In New York overnight, the S&P 500 tumbled by -0.56%. The blue chips Dow Jones index was down by -0.25%, and the tech-heavy Nasdaq was lower by -0.59%.
Retail sales data in the US rose more than expected in December, dashing hopes of multiple Fed rate cuts this year.
The Fed has raised interest rate to a 23-year high in a bid to tamp down high inflation, and today’s data may bolster the chances that it will stay there.
“A recession seems increasingly unlikely after retail sales beat estimates for the sixth straight month,” said David Russell at TradeStation.
According to data from the CME FedWatch Tool, money market traders are now placing just a 57% chance of a Fed cut in March, down from 67% last week and 71% a month ago.
To stocks, and Spirit Airlines plunged by -22% for a second day of double-digit losses after a U.S. District Court Judge blocked the budget carrier’s proposed merger with JetBlue Airways.
Apple stock was down -0.5% as the company faces a US antitrust lawsuit which alleges that Apple had imposed software and hardware limitations on its iPhones and iPads to wards off rivals.
Meanwhile, iron ore stocks will be ones to watch in today’s ASX session after the ferrous metal fell another -2.7% to $US125.80 a tonne.
Former PM Kevin Rudd spoke at the World Economic Forum in Davos overnight, saying that China’s economy is not headed for permanently slower growth.
Rudd believes that China’s economy is not peaking, nor is it permanently slowing down.
“The key question for the future is the restoration of Chinese domestic consumer confidence, because that is China’s best long-term guarantee and it lies at the heart of Chinese economic policy,” Rudd said.
His comments came as China’s Q4 GDP grew less than expected – 5.2% versus the 5.3% estimate – according to a release yesterday.
Gold price retreated by another -1% to US$2,005.91 an ounce.
Oil prices climbed by +1%, with Brent now trading at US$78.26 a barrel.
The benchmark 10-year US Treasury yield rose another 4 basis points (bond prices lower) to 4.11% as traders unwound rate cut bets.
Iron ore futures fell almost -3% to US$125.80 a tonne.
The Aussie dollar slumped further against the greenback, down by -0.5% to US65.51c.
The US dollar has now staged the biggest rally since March, as traders questioned the Fed Reserve’s cuts that’s baked into the greenback.
Meanwhile, Bitcoin was down -2% in the last 24 hours to US$42,685.
QuickFee posted a record revenue for Q2 FY24 of $5.1 million, up 38% on the pcp, and up 21% on the previous quarter. Total US Pay Now revenue was up 20% on pcp, while in Australia, AU Finance TTV was up 23% on pcp. Quickfee says H2 FY24 result is expected to continue recent trends , and could be stronger than H1 FY24.
Adavale Resources (ASX:ADD)
Adavale says the 2024 initial exploration program has been finalised for prospective uranium targets close to the Northern Flinders Ranges, South Australia. The upcoming program will include soil/rock chip, gravity and gamma surveys in a 3 to 4 week program. Adavale believes it is well placed to capitalise on the strong uranium price environment, which has seen prices exceed US$100/lb.
The maker of robots that build houses has executed a binding suite of agreements for a US Demonstration Program with CRH Ventures Americas, one of the largest concrete block suppliers in the US. The agreement will see the two companies jointly construct up to 10 houses in the US with FBR’s Hadrian X construction robot, while FBR has granted CRH Ventures an exclusive Option to enter into an exclusive joint venture for the supply of Wall as a Service in the US, if the Demonstration Program proves to be successful.
Pioneer Lithium (ASX:PLN)
PLN reported outstanding channel sample assay results from its recently optioned Benham Lithium Project in Ontario, Canada, confirming the significant potential of outcropping pegmatites discovered late last year. Grades of up to 4.61% Li2O were confirmed. Highlights include: 2.33% Li2O across 2.1m including 1m at 4.61% Li2O, and 1.29% Li2O across 2.1m including 0.7m at 1.74% Li2O.
Loyal Lithium (ASX:LLI)
LLI announced drill core assay results from Dyke #01 2023 drilling, at the Trieste Lithium Project, located in James Bay, Quebec, Canada. The drill core assay results exhibit high grade lithium from surface. Highlights include: 40.0m of 1.2% Li2O from 15.0m, and 28.8m at 1.1% Li2O from surface.
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